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UK house prices up 7.2% year on year, latest ONS data shows
UK house prices increased by 7.2% in the year to February, down from 8.4% in the year to January 2015, according to the latest official figures from the Office of National Statistics. House price annual inflation was 7.4% in England, 1.1% in Wales, 6.4% in Scotland and 14.2% in Northern Ireland. The data confirms that annual house price growth is showing signs of slowing across the majority of the UK. Annual house price increases in England were driven by an annual increase in the East of 10.7% and in London of 9.4%. Excluding London and the South East, UK house prices increased by 5.9% in the 12 months to February 2015. The data also shows that on a seasonally adjusted basis, average house prices increased by 0.6% between January and February 2015. In February 2015, prices paid by first time buyers were 7.4% higher on average than in February 2014. For owner-occupiers (existing owners), prices increased by 7.2% for the same period. It suggests that actions taken by the Bank of England’s Policy Committee to dampen the growth of last year have done their job and put the housing market on a more stable footing for the short term at least, according to Peter Williams, executive director of the Intermediary Mortgage Lenders Association (IMLA). ‘Seeing annual price rises dip below an annual increase of 6% outside London and the South East is a step in the right direction to improve affordability,’ he said. ‘However, in part the slowdown has only been possible by squeezing potential buyers out of the market by restricting access to finance, creating some extra breathing space for politicians to get to grips with the fundamental supply/demand imbalance,’ he added. Continue reading
UK buy to let landlords increasingly see their properties as their pension
The new pension freedoms that came into force last week in the UK could trigger a huge interest in over 55s becoming landlords for the first time, it is claimed. New research by Property Let By Us, an online letting agent, shows that for 70% of younger landlords, their buy to let portfolio is their only pension fund. The study also shows that just one in five landlords said their property portfolio forms part of their pension provision. A further third of landlords are building their portfolios so that their children can benefit from the investment in the future. Over a third of landlords said their mortgages will be paid off by the time they retire and just 6% claim they will sell their properties on their retirement. What’s more, 28% of landlords plan to expand their property portfolios in 2015 and over a third of landlords use a letting agent to help manage their properties. ‘With mortgage rates at an all-time low and rents rising across the UK, it is no surprise that more and more investors are entering the buy to let market. Our research shows that many landlords see their property portfolios as a long term investment and a major part of their pension planning,’ said Jane Morris, managing director of Property Let By Us. She pointed out that potential new retiree landlords need to choose their property and location carefully. A recent report by estate agents, Chestertons shows that Birmingham has a 6.8% average gross rental yield, while Manchester has 6.4%, Sheffield has 6.3%, Leeds has 6% and Cambridge has 4.6%. ‘Anybody considering becoming a landlord should speak to local estate agents to see what the rental demand is like locally and what monthly rental income they can expect. However, if retires have no experience of the property market, they may be better considering alternative investment options,’ added Morris. Continue reading
UK landlords get confused over betterment principle, study finds
Some 60% of landlords in the UK admit they don’t understand the betterment principle, whilst 90% say they fully understand fair wear and tear, according to a new report. The betterment principle means that if an item, such as a carpet was old at check-in, the landlord can’t replace it with a new carpet, but some compensation is allowable towards the item. The research from My Property Inventories also shows that over 80% of landlords said inventory evidence helped them to win a tenant deposit dispute. Furthermore, 60% of landlords admit to never visiting their properties to check the condition, while just 6% say they regularly make spot checks on their property. ‘We do find that landlords and agents push for new for old at the end of tenancies, and have unrealistic expectations of what they can claim against tenant deposits,’ said Danny Zane, director of My Property Inventories. He explained that the tenant has a duty of care to return the property in the same condition at the end of the tenancy, as at the start and listed on the inventory report, with an allowance for wear and tear. The law does not allow landlords to claim ‘new for old’ from the tenant deposit. ‘The key problem is that agents, landlords and tenants have different expectations when it comes to fair wear and tear issues. There is a distinct difference between fair wear and tear and actual damage. For example, carpet tread will flatten over time where there has been foot traffic, but cigarette burns, stains or soiling will incur a charge,’ said Zane. He pointed out that the betterment principle applies to cleaning issues too. ‘If a carpet was stained and marked at the time of check-in, a landlord can’t expect the tenant to pay for carpet cleaning at the check-out, no matter how long the tenancy has been,’ Zane explained. ‘However, if the carpet was recorded in the unbiased inventory report at the start of the tenancy as clean, with accompanying photos and is found to be stained or marked at check-out, the cleaning costs can be deducted from the deposit,’ he added. The firm believes that it is important to note that normal wear and tear is a fact of life within tenancies. ‘The best way for landlords and agents to ensure that the property’s condition is fully recorded at the start of the tenancy, is by having a thorough and professional un-bias inventory, along with a detailed check-in and check-out report,’ Zane concluded. Continue reading
